Home prices are falling or flat in most major markets, sales are slow and spring is about ready to get sprung.

You finally decided to take the plunge on that home improvement job because you know it'll shore up value that's under pressure, because you need the space, because, well, you haven't always given your house the best care.

For whatever reason, it's time to get the job done, but you need some cash.

First, now is NOT the time to talk to your contractor.

You may have the most trustworthy contractor in the neighborhood. They neighbors say so and they have good work to prove it.

You'll still set yourself up for a potential conflict of interest if you have the contractor do the work and provide financing for the job.

Chances are, the loan is not his or her money, well, until you hand it over.

A loan from the contractor could be financed though lenders offering commissions to the contractor, commissions you could end up paying in the form of financing or originating costs, interest rates or other fees. That could also mean the cash is in your contractor's pocket before the work even starts. If the work isn't up to par, you're up the creek with no money to leverage corrections.

What's more, the more you spend, the more you eat into the value that's returned to your home depending upon the home improvement.

Get your own money. Pay in installments. Learn your local contracting laws in terms of how much you must pay the contractor over time. Over time is the only way you should pay contractors. As the work progresses.

Put the payment terms in the contract and don't forget, you hired the contractor.

You are the boss.

Manage your own financing.

Market researcher Informa Research Services suggests Home Equity Lines of Credit (HELOC) as a good starting point because rates are cheaper than many credit cards, personal loans and second mortgages.

However, rate shoppers who can be rocks about financial management and budgeting shouldn't over look certain credit cards for cheapie rates.

Cards with low-introductory rates to fund small projects that don't last longer than the introductory rate -- provided they are also paid off before the teaser rate ends -- can be among the best deals.

Those who have developed exemplary credit over time often get offers for zero-percent introductory interest rates that can last six months or more. The key, of course, is knowing what will happen if the bill isn't paid when the introductory rate ends and not missing the deadline to pay off the card.

A compromise could be a fixed-rate second mortgage or cash-out refinance. Like HELOCs they are tax deductible, but with a fixed rate you remove the potential for cost melt down, something that could also happen with a HELOC, should the rate rise during a long project or one that lingers unexpectedly.

Advises Informa: "It's best to always pay close attention to the most current rates and choose the finance method which fits your needs the best."

Informa says to make the choice:

• Compare. Look at what sellers are netting on comparable homes in your area and what features they include. The cost to add an outdoor patio or an extra room may be more than you can recoup in added value when it's time to sell. If you think you may sell soon after the work is complete, consider the paybacks of smaller improvement say, new kitchen cabinets and a sink instead of a major kitchen re-do.

• Create a budget. Your goal is to build in value not build up additional debt. A HELOC gives you the flexibility of using only what you need. A second mortgage or cash out means the money is financed whether you need it or not. Consider combining credit -- a credit card for supplies, a HELOC or cash out for the work. Your goal should be to use financing that creates value in your home without causing you to incure additional debt.

• Shop around. There are scores of financing options. Compare not only the interest rate but also the costs. Some HELOCs are available fee-free and typically come with less costs than a cash-out or second mortgage. For every loan you consider, examine the all the costs from originating fees and points to commissions and closing costs.

Published: March 5, 2007

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.